Cyber crooks are taking a new route to work with their associates in foreign countries and simultaneously hide traces of money: cryptocurrency. Amid a debate over the legality of digital currency and calls for regulation, officers from the Delhi Police’s Cybercrime Unit are finding that cryptocurrency is rapidly becoming a medium for illegal transactions, which which poses a myriad of challenges to investigative agencies.
According to senior police officers, scammers who sell cryptocurrency have three modus operandi: running fake call centers, using Chinese apps to scam people, and scamming gift cards.
In July, police busted one such fake call center after arresting four men in Chittorgarh, Rajasthan, who allegedly cheated people under the guise of giving them loans and converted that money into cryptocurrency. Police said the defendants were inspired by a YouTube video and approached a Chinese national on Telegram, who was also involved in online fraud, to learn how to trick people. They then approached people with an online loan offer and asked them to deposit anything between Rs 40,000 and Rs 1 lakh. DCP (Rohini) Pranav Tayal team discovered that the gang members were using a BMW car, which was purchased with this money, and one of the defendants is involved in a Rs 1-crore cheating affair.
Last year alone, the IFSO unit arrested 87 people in bogus call center cases. Senior Cyber Crime Unit officers said that in the majority of these call centers, the accused dealt with cryptocurrency.
“Right now, we not only have to catch the cybercriminals, but also get the money. It sometimes becomes difficult because these men have several bank accounts, e-wallets, gift cards, where they hide money. Also, with cryptocurrency, it is difficult to tie an account to a person because the transactions are anonymous. Most of the money is sent to offshore accounts within 1-3 days. Once sent, it cannot be retrieved,” said a senior Cyber Crime Unit officer.
“With banking transactions or online payment systems, it is easy to detect the trail of money and we can also freeze transactions and recover money at certain times. However, the cryptography is fast and we don’t know who the final recipient is. You don’t need as many IDs or documents to set up a crypto wallet,” the officer added.
Over 50 cases have been reported this year where Delhi-based fraudsters were caught posing as directors or heads of agencies and tricking elderly people/government officials on the pretext of buying gift cards and convert them into cryptocurrency.
The gangs used photos of top cops from Delhi Police or other state forces and messaged their subordinates, asking for instant gift cards. They usually asked them to buy two to five cards worth Rs 5,000 to Rs 10,000 each.
“It’s a delicate situation. These gangs are smart. They use phrases such as “don’t call me, I’m in a meeting” or “do this urgently”. They understand the hierarchy system in agencies. An SI-level constable/officer would not say no to a DGP-level officer and buy cards without calling/confirming. Cards are immediately converted to crypto,” an officer said.
The cybercrime unit also discovered that the defendants posed as directors of AIIMS, Safdarjung and other reputable hospitals and defrauded “subordinates”. In some cases, they posed as the principals of Delhi University colleges, deceiving people up to Rs 30,000 to Rs 50,000.
Made in China
In April, the Cyber Crime Unit arrested eight people from Delhi, Rajasthan and Haryana and busted a multi-crore scam and extortion syndicate. Police have also identified three Chinese nationals who are part of the union. The accused created a fake loan app and tricked people into installing it to get easy loans. However, the accused was stealing personal information from victims’ devices and harassing or threatening them.
The affair came to light when a woman complained that the people behind the loan app had altered her picture and extorted money from her. A team led by ACP Raman Lamba arrested the accused within a month.
“One of the defendants, Rohit Kumar, was arrested with Rs 8 crore; others were caught with three high-end SUV cars. The defendants were running a multi-crore scam. Within two weeks, the cheated amount (Rs 8 crore) was converted into crypto. They threatened their targets and extorted as much money as possible. In this gang, the defendants in India would send their money to associates sitting in China/Dubai, who would convert it into crypto and pay everyone,” said DCP KPS Malhotra (Cyber Crime Unit).
Police said most of the defendants in the Chinese app case and other scams are college graduates who lack work experience or education. “It has become easy for criminals to learn the ropes of cheating online. There are videos online and you can approach strangers. Additionally, many gang leaders have worked with one or two gangs to learn the trade,” an officer said.
To change direction
Faced with these new challenges, Delhi police are now alerting investigators to look closely at phones, and in particular crypto apps, whenever a fraud suspect is caught. While most crypto platforms are being used illegally in India, officers have been told to keep a “keep an eye out” for criminals and recover defrauded money at the earliest.
Newsletter | Click to get the best explainers of the day delivered to your inbox
In a recent fake international call center case hacked by the Crime Branch, 18 people allegedly defrauded US nationals by posing as US government grant department officials. Officers are now examining the crypto wallets of the main defendant and his associates, who were caught with a BMW and an MG Hector car.
A team led by DCP Vichitra Veer and ACP Abhinendra Jain raided a house in Mundka and found more than two dozen callers and the main defendant Nitin Singh. The team later discovered that Singh owned properties in Delhi-NCR and high-end cars. DCP Veer said: “The owner and the tele-callers were taken to the scene with devices. They purchased data of US nationals from vendors. The callers posed as US officials and called US citizens offering education programs, and those who accepted had to pay a $200 registration fee. So far, two men have been arrested and 16 people apprehended in the case.
An officer added, “We are now checking the cryptocurrency angle. Singh and his associates used expensive software to run the gang and bought data from vendors. We suspect the money was also sent using crypto.